Leaving a TSP account untouched after separating from federal service is still a choice. The balance stays invested in the existing fund selections and keeps growing, though no new contributions can be added. Required Minimum Distributions begin at age 75 for anyone born after 1960.
Video Transcript
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A lot of federal employees leave their TSP untouched after they separate. Sometimes it's because the decision feels complicated. Sometimes it just gets pushed to the back burner. But doing nothing is still a choice, and there are a few things you should know about what that looks like.
Your money stays right where it is. You can leave it in the TSP after you separate, and it will keep being invested in whatever funds you're already in. The two things to keep in mind: you can't add to it anymore once you're separated, and you'll be required to start taking money out at age 75 if you were born after 1960.
Whether leaving it alone is the right long-term move really depends on your overall plan. Understanding how your TSP fits alongside your pension and Social Security is worth looking at before you just let it sit. Talk to an advisor and make sure you have a plan in place that will help you reach your goals.
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